Green Shield Insurance provides NEMO Corporation with coverage for prescriptions

Question

Green Shield Insurance provides NEMO Corporation with coverage for prescriptions, dental work, and extended health services. Each subscriber uses $435 worth of dental services per year; $410 worth of prescriptions per year; and $385 worth of extended health coverage per year. Green Shield has a 25 percent copayment clause, and a loading factor of 65 percent. NEMO will pay 50 percent of the plan costs. What are the annual and monthly premiums charged to the employees of NEMO corporation? (Show all of your work to earn full marks.)

Explanation / Answer

dental services per year $ 435 prescriptions per year $ 410 extended health coverage per year $ 385 TOTAL/year $ 1230 25 percent copayment $ 307.5 Net cost/year $ 922.5 (1230-308) Total Plan Monthly Cost Per Employee $ 76.88 (923/12) loading factor of 65 percent $ 219.6 (76.88/(1-0.65)) NEMO will pay 50 percent of the plan costs $ 109.8 Monthly Plan Premium Per Employee $ 109.8 Annual Plan Premium Per Employee $ 1318

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